MERCKEN, Roger; MOTMANS, Lisette; HOUBEN, Ghislain - In: EuroEconomica (2010) 24, pp. 64-71
This paper covers the valuation, from beginning to implementation, of a European call option on a stock using the multi-step binomial model in a risk-neutral world. The aim is to introduce this model in a simple but rather unconventional way. The usual presentation of the risk-neutral valuation,...